Following industry feedback on its DP23/1: Finance for positive sustainable change discussion paper, the FCA has said it is taking no further action but will continue to monitor developments in the market to make sure it is functioning well with the “aim to help the sustainable finance market to grow responsibly and continue to promote the UK as a leading financial centre”.
In its statement the FCA said it was “committed to supporting the role of the financial sector in enabling an economy‑wide transition to net zero, and to a sustainable future more broadly”.
DP23/1 has been published, it said, to encourage an industry-wide dialogue on firms’ sustainability-related governance, incentives, and competence and to “help the financial industry deliver against its potential to drive positive sustainable change”.
In particular the Regulator said it wanted to “highlight good, evolving practices while considering whether there is a case for further regulatory measures in this area.
“The responses we received were generally positive about the importance of sustainability matters and the role of the themes outlined in DP23/1.”
Rules published since the launch of DP23/1, have included
- The Consumer Duty came into force on 31 July 2023.
- SDR and labelling rules effective from 28 November 2023.
- The Anti-Greenwashing Rule, which came into effect on 31 May 2024.
The FCA said it was “encouraging that many respondents to DP23/1 acknowledged the importance of these measures”.
The statement continued: “We recognise the importance of allowing time for new measures to be implemented before introducing further rules in these areas. And for the DP’s themes not captured by these measures, we recognise that current practices are still developing. Indeed, for some, we continue to oversee forums that bring industry representatives together to enable market-led solutions and guidance, such as the Climate Financial Risk Forum (CFRF) and the Adviser’s Sustainability Group (ASG).
Consequently, the Regulator said it is not currently considering introducing new rules on the themes discussed in DP23/1. “But the DP’s themes remain important to firms’ success in:
• Embedding sustainability considerations.
• Delivering value to consumers.
• Supporting market integrity.
“We will continue to monitor developments in the market to make sure it is functioning well.
“In keeping with our regulatory objectives, we will continue to focus on areas where potential harm to consumers, market integrity or competition is greatest, and where we think regulatory action can make a positive difference.”
It will continue to:
• Carry out supervisory engagement.
• Bring market participants together to develop market-led solutions.
• Influence on the global stage.
“Through these actions, we aim to help the sustainable finance market to grow responsibly and continue to promote the UK as a leading financial centre.”
